Forex Analytics of LiteForex of 05.11.10: CAD: Canadian Dollar goes down due to domestic news

The ?ate of the Canadian Dollar goes down after six days of growth at the Forex currency market on Friday as soon as Government cancelled Potash sale deal.

Forex forecast: MACD indicator is in the negative area for the pair USD/CAD however it goes up today giving grounds for a pair buy signal. Stochastic Oscillator has not formed a clear signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.0050 the pair will go to 1.0070 and 1.0100. If the level of 1.0020 is exceeded, traders’ targets will be the levels of 0.9990 and 0.9950.

Six days growing trend started to reverse for the CAD when the Canadian government declined BHP Billiton offer to buy Potash Corp. of Saskatchewan Inc for $38.6 billion. Canadian Dollar dropped to the lows of 15th October which was 1.0048.
Canadian employment data is scheduled to be released today which can intensify volatility in the pair.

At the Bank of Canada meeting held earlier the decision was made to maintain interest rate unchanged at the level of 1% per annum. The last increase took place in September (+25 basis points). According to the regulator who left the rate unchanged despite market expectations, while world economy tries to recover after the crisis, it is necessary to study carefully incentives reduction aspects in the monetary policy. 
Central Bank of Canada also reported this week on the downward revision of the economic growth rate forecast for this year to 2.3% against the previous level of 2.9% - apparently neighborhood with the USA where the economic situation remains difficult, has its negative impact. The Bank of Canada made quite aggressive statements. Thus, the head of the bank Carney noted that activity in the consumption sector in Canada will slow down and economic growth will become more moderate.

The Bank of Canada will start intervention only in case of extreme situation at the market when the economy will be in jeopardy.
It became known earlier that Canadian economy has resumed its growth –Canadian GDP increased by3% in August after the recession in July, which agreed with the forecast. Manufacturing sector provided support to the economy. Oil and gas production also supported country’s economy. (+1.5%). Manufacturing sector increased by 0.5% in August, wholesales sector growth amounted to 1.1%.

 

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